What factors do investors prioritize when evaluating businesses?

In my experience, we look into the market where there are gaps. Property has many and different features, pricing for affordability to luxury for high end, as an investment tool to hedge against inflation with annual returns more the savings account and capital appreciation as a bonus. Products that don’t take too long to liquidate and is a need for general population. Look for areas with population growth as land is limited and demand increases . Look for properties on island or in valleys as these are the fastest growing assets if there is economic growth in the area.

TAM or the total addressable market is the single largest factor basis which venture capitalists evaluate businesses to invest. It indicates the achievable scalibility of the product/platform. If there's not a big enough market, the offering will remain to be a niche and will not be able to achieve the economies of scale that lead to return on investment for VCs.

In reviewing any investment -it is important to get to the absolutely bottom of all things. That might mean, working entrenched for a period of time-amazing what you can find out over the water cooler. In addition, a deep dive into the expense line items -do they stack up? Are there Capitial expenses embedded in the numbers -it is important to dissect the spreadsheets but also get a humanities perspective from the staff.

For me it is all about the facts of performance in key numbers of course but also about the businesses performance in "just right now". Also i think today many investors look at the human capital you get within the company. You need to have the right management team that can be trusted to take the venture forward fast and with open mind.

Investors bring a personal touch to their assessment of businesses, tailoring their focus based on unique investment strategies and goals. Nevertheless, investors looks at some common factors such as the financial health and profitability, market potential, cost structure involved, exit strategies, and the social responsibility it offers to the society. In the current market investors are going beyond the numbers and embracing the human facets that shape a company's journey and the impact its making on the society.

This is an extension of the first point - where you can provide in-depth details of your solutions and offerings in the market, and how they will generate revenue. This "how" is not about strategy or marketing. It is about what you will offer to customers and what & how they will give you money. Ideally, Revenue Model have only 3 categories: 1. You earn by selling products or services, 2. You earn by renting or leasing (Properties, IPRs etc), 3. You earn by enabling/ distributing (E-commerce Marketplaces, Logistics, Dealerships, Brokers etc). The type of revenue model can depend on the nature and delivery of your business offerings. It matters what you offer and how you deliver it.

Investors closely scrutinize a business's model and revenue streams to assess its sustainability and profitability. A clear and viable business model demonstrates how the company creates, delivers, and captures value. Diverse and reliable revenue streams reduce risk and enhance attractiveness to investors. Understanding the scalability and durability of these models helps investors gauge the long-term potential and attractiveness of an investment opportunity.

When buying a business, the main analytics is the sum of all future cash flows. So assumptions have to be made of the model, it's ability to last and to grow.

The model must not only reflect your demand market, it must enhance it with your unique value proposition. We should strive to emulate a "blue ocean" strategy even in crowded markets. It's more work, yet more rewarding. Revenue streams must be managed, protected and nurtured with a cultivated mindset. Like a valuable crop, if cared for, it will yield an abundant and lucrative harvest.

Modelar negócios implica aprofundar em todas as camadas do business, da oferta a implanta??o. Na prática tenho visto que um business plan, que ofere?a op??es de modelos de negócios e de cenários, em destaque os de proje??es produtivas e financeiras, oferecer ampla vis?o e conforto a Investidores. Considerando o grau de dificuldade do business plan, nas fases preliminares negociais um Teaser descritivo com cenário resumido produtivo-econ?mico contendo gráficos abrangentes usualmente plugam negócios.

For a startup to say that they have no competition can be a grave mistake because not having competition may mean - - you haven't analysed the market well enough, shows your unpreparedness - your product may not have a market if no one else is doing it or have done and failed Looking at the competition allows investors to ascertain the depth and availability of the market and spot the gaps.

India is a market where it is impossible to not have a competitor, unless you are a monopoly by law (Railways & Military). This is again in the context of market size and opportunity where you identify the players catering to the same customers to solve the same problems. However, the business models can differ and thus the relative strength of one competitor differs from another in the same market. Also, the market opportunity and competition decides how much control the start-up will have on product offerings and pricing. Higher the competition, lower the control and vice-versa.

Investors prioritize businesses with a competitive advantage and strong differentiation. A unique selling proposition or competitive edge, whether through technology, branding, or operational efficiency, can contribute to sustained success. Investors seek companies with a defensible position in the market, as it enhances the potential for long-term profitability and resilience against competitors. Differentiation is a key factor influencing investor confidence and interest in a business.

A competitive advantage either leads to higher margins or larger market share (and thus higher revenues). On the other hand, if one is purchasing a commodity, then price is the differentiator. But some companies were able to rise above this. An example is Shaw carpets.

Por isso, deve-se dar ênfase nos pontos que a tornam, de fato, inovadora e como pretende impactar o mercado com produtos ou servi?os exclusivos. Pode-se dizer, que é um aspecto capaz de influenciar a decis?o de um investidor. Dessa forma, as empresas ou Startups precisam dar respostas consistentes, apresentando as propriedades intelectuais, inova??o e capacidade de atingir o mercado-alvo com eficiência, e de maneira que se destaque dos concorrentes e atenda às necessidades dos clientes de forma surpreendente. Ciente disso, os investidores precisam encontrar características sólidas e uma boa gest?o para ter seguran?a de que a startup ou empresa é promissora. Sendo assim eles procuram por ideias inovadoras e gestores íntegros, perseverantes.

This is one of the very important aspect of any business, especially when assessing the service based start-up, where there is no tangible physical products involved. Such start-ups have their single most important resource - The Human Resource. The founders, the managers, the operations, the marketing, the finance and so on and so forth. It is important to have right people for the key roles. The key metrics to see here are Revenue to Salary ratio, employee retention, employee benefits and overall employment policies in the company.

Possible opportunities arise when evaluating a business that does not have the right team in place. If the company has a competitive advantage, but poor leadership, then an investor may see an opportunity to purchase the business and put in place a strong leadership team, which can catapult sales and staffing.

Great points. I would add, honesty and self-assessment. A management team that knows their strengths and is able to achieve their goals/targets is great, but knowing their weaknesses and being honest about them is another. I see a lot of deals that have synergies around combing teams to solve weaknesses or strategic alliances that can create synergies to increase revenue and market share while creating efficiencies to reduce costs.

Investors place significant emphasis on the team and track record when evaluating businesses. A capable and experienced team instills confidence, demonstrating the ability to execute business plans effectively. A track record of success, whether in previous ventures or achieving milestones, serves as evidence of the team's competence. Investors often see a strong team and proven track record as indicators of a company's potential for navigating challenges and delivering on its promises.

Track record é uma das maiores dores de empresas e profissionais, pois deturpa a imagem dos principiantes e pormenoriza os com histórico inferior aos benchmarking. Neste ponto o máximo primor empregado, qui?á com entregas acima da média, contendo plus, inova??o, disponibilidade, clareza, transparência, franqueza e alto domínio de pautas é um protocolo que tenho visto pequenos contratando em detrimento às já consolidadas. "O que merece ser feito, fa?a bem feito".

This is the epitome of showcasing the founder's capabilities. If the founders have built a product, at least an MVP, and tested out in the market commercially; it is a great milestone for them. Investors also get a confidence in such businesses as the product - market fit is established and now the start-up can use a bit of tweak here and a pivot there as required. And for this, the investors can always guide them through.

Investors closely assess a business's milestones and traction to gauge its progress and market acceptance. Meaningful milestones, such as product launches or strategic partnerships, indicate a company's ability to execute its plans. Traction, in terms of customer adoption or revenue growth, provides evidence of market demand and validates the business concept. Investors often favor businesses that demonstrate a clear path of achievement and positive momentum toward their goals.

This is true. Investors are keen on understanding the specifics of the funding needs and the valuation of a company. They are looking for a transparent, well-thought-out plan that clearly states how the funds will be utilized and what the expected outcomes are. This is crucial for demonstrating fiscal responsibility and for building trust. Moreover, the valuation must be justifiable and attractive, reflecting a realistic assessment of the company's current worth and future potential.

In my Experience they only looking for benefits and benefits, business model, net profits. finally most of them they need an profits before investing and they are not serious.

Tenho orbitado no ambiente de modelagem de negócios de implanta??o de novas tecnologias internacionais na América do Sul; se obter financiamento ou private equity para negócios antigos já é complexo, imaginem para novos negócios?! O caminho do private equity com acoplagem de garantias, contratos de venda futura (PPA) e contrato tripartite em SPE tem sido mais suave do que buscar financiamento. No ambito convencional avalia??o via valuation emitido por notáveis do mercado e financiamentos sustentados por projeto de elevadíssima score, tanto para obten??o de valores quanto a sustentabilidade do negócio, tem sido os facilitados e premiados.

Investors worldwide are increasingly aware that sustainability and social responsibility are crucial determinants for the longevity and profitability of a business. This paradigm shift is supported by data showing a correlation between ESG practices and corporate financial performance. In my journey as an executive in the real estate investment and renewable energy sectors, I have witnessed how the adoption of sustainable standards can attract more investments and create a positive market perception. For instance, projects with energy efficiency certifications and green building practices often exhibit lower operational costs and higher tenant appeal, leading to more stable returns.

I would like to focus on people who are or can be a potential investors but are sitting sidelines because either don’t have the experience, the vision or the trust. So what’s needed is the righteous leadership, which can decode the steps to investing. All of these categories are great avenues for varied investors. In the simple words, everyone is looking to make good profit with the promise of future expansion. Once they become savvy investors then they start seeing the other Categories mentioned here.

A posi??o de um Investidor é miss?o desafiadora, cenário este onde inova??o, tecnologia, adapta??o, transforma??o, rentabilidade, ESG, qualidade, garantias, transparência, seguran?a legal e contratual, engajamento, capacidades multidisciplinares e concretudes, s?o desejáveis ao Investidor na tomada de decis?o. Para Marks “quando vista no longo prazo, a psicologia do Investidor frente aos ciclos de mercado, que parecem voláteis e imprevisíveis, flutuam de maneiras que se aproximam da confiabilidade”; foco no longo prazo! Buffett diz que para um Investidor pre?o é risco e valor é o recebível líquido; foco em lastrear TIR! Entender as dores do Investidor, suas aspira??es, prover business sustentáveis e lucrativos, é assertivo!